We understand that taxes are, perhaps, the most unglamorous part of running a business. And messing it up can result in pricey penalties.
Although the tax season may seem overwhelming and dreadful, you must face it and come out victorious. A successful tax season and successful accounting can help boost your confidence in running your store, and improve your productivity, management and sales.
With only a few mindful practices, your e-commerce accounting and tax filing can become smoother and stress-free.
So, take a deep breath and let’s dive in.
1. Integrate your accounting software with your online store
You wouldn’t want a run-in with the officials on the inaccuracy of your accounting, would you? So, if you’re still doing your accounts on the back of a notebook, stop right now.
Accounting software are the best way to track your money. Through efficient creation and cataloging of invoices, these software keep your books up to date and accurate. With just a click of a button, you can access all your past purchases, pay-outs and your entire inventory. E-commerce companies like Shopify offer a lot of different apps through which you can integrate your store with your accounting software.
By doing this, you don’t just ensure efficiency, but also save time by avoiding manual entry and calculations. For accounting, you can explore software like QuickBooks, Zapier, Xero and more.
2. Record all your revenues and expenses
The importance of recording all your revenues and expenses cannot be understated. If you’ve been paying taxes even for a few years, you would know how important it is to have a record of your business’ revenues and expenses.
Many of your expenses can help reduce your taxable income. These can include home office expenses if you run your business from home, website domain and hosting fees, shipping costs, and accountant fees – all the more reason why you should get a professional accounting agency to help you do your accounting and taxes.
Make use of apps like Evernote and Expensify to keep digital receipts to avoid any hassle during audits.
3. Reconcile your account on a monthly basis
Wondering what this means? In simple terms, you need to ensure that your bank statement and your accounting software are in agreement. Many accounting software allow the option of syncing your transactions with your bank account feed.
This is extremely helpful and allows you to avoid manual entry of transactions. Once you’ve integrated your accounting software with your bank account statement, go through the reconciliation report on a monthly basis. The report will automatically match your transactions, and will highlight any error, duplicate charges or fraudulent charges.
4. Keep your tax settings up to date
When you start your e-commerce store, your tax settings are configured with the countries you operate from and ship to. But as you expand your business, make sure that you update your tax settings according to the laws of the new countries you’re venturing into. You’ll also be coming across information on products that are tax-exempted in some countries.
Gather all the information you require for selling your products in different countries. Google it, reach out to your local tax authorities, or get an accounting firm on-board that will happily do the job for you.
If you want to get on top of your books, but don’t know where to start – ask an expert. At BMC SAAS, we provide a 360-degree accounting service to clients around the world. BMC SAAS will be your reliable offshore team managing your accounting operations so you can focus on what you love.
To learn more about how BMC SAAS can help your business, contact us about your business’ requirements.
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